Government needs to plan for the aging population

Colin Craig
Canadian Taxpayers Federation

Recently an NDP MLA was chided on social media for reading Mouseland, a somewhat partisan story to students in a local elementary school.
Instead, the MLA should have read the old fable The Ant and the Grasshopper – not just to the children, but also to his caucus. Premier Notley’s recent comments, and her party’s budgeting to date, suggest they could do with a lesson in planning for the future.
For those unfamiliar with The Ant and the Grasshopper, it involves an ant that refuses an invitation from a grasshopper to relax and chat on a nice summer day. The ant notes it is too busy dragging some corn back to its nest to prepare for winter. Winter eventually arrives and the grasshopper is seen cold, dying and begging for food. It seems the grasshopper spent too much time playing instead of working hard and planning for the future.
Recently, just like the grasshopper, Premier Notley dismissed a report about Alberta’s long-term financial prospects.
The Office of the Parliamentary Budget Officer, an independent, non-partisan, federal office released analysis that looked at the sustainability of each provincial government’s finances as our population ages. The report indicated that Alberta, over the long-term, has a significant, ongoing financial hole to fill; the equivalent of reducing annual spending or raising taxes by $14 billion (for perspective, that’s about a quarter of the provincial budget).
When asked by the media about the federal report, Premier Notley largely dismissed the findings as an “interesting academic exercise,” but one that has “no value in terms of projections.”
Earlier this year the Canadian Taxpayers Federation filed a freedom of information request with the Alberta government, asking for analysis as to how an aging population will impact the government’s finances over the long-term. Incredibly, we received a response back from the Notley government that noted staff conducted a search for long-term analysis but “failed to retrieve any records.” The provincial government simply hasn’t bothered to plan for the future.
To call the government’s response troubling is an enormous understatement. Just imagine going through life without bothering to plan for your retirement.
It is difficult to project what will happen with government revenues and expenditures over the next 10, 20 or 30 years. However, most experts agree that our aging population will have an enormous impact on government revenues and expenditures, and it’s important to try to plan for such a change.
According to Statistics Canada, from 2013 to 2038 the percentage of seniors in Alberta will grow from 11 per cent to 17 per cent.
Government data also shows that the average Canadian in the 50-54 age bracket cost the health care system $3,051 in 2013. That same year, those in the 65-69 age category cost the system twice as much; $6,360. But both age brackets have nothing on those in the 80-84 age range at $16,008 per year.
Premier Notley routinely suggests that her government is “protecting public services” by refusing to curtail unnecessary expenditures. But by not planning for the enormous cash crunch facing her government, it should be clear that she is doing more to put public services at risk than anyone else in the province.
Indeed, Premier Notley and her caucus need to start taking financial planning more seriously. They should start by reading more of The Ant and the Grasshopper and less of Mouseland.

 

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